Franchise Privacy Pitfalls: What Aussie Franchisors & Franchisees Need to Understand Immediately!

Privacy laws have changed in Australia — and franchise networks must catch up. Are you ready?

With updates to the Privacy Act 1988 (Cth) now in force from 10 June 2025, franchisors and franchisees should immediately revisit how they collect, use, and protect personal information. The reforms bring:

• Tougher compliance obligations,

• A new right for individuals to take legal action,

• Massive penalties (up to $50 million), and

• A clear message from the Office of the Australian Information Commissioner (OAIC): enforcement is on.

Franchise networks are particularly exposed due to their structure and multiple data entry points. And yet, many operators are still relying on outdated templates or unclear practices — often without realising where legal responsibility lies.

At Bane Legal Services, we don’t provide legal advice. But we do help franchisors and franchisees connect with commercial lawyers who specialise in these challenges. Here's what you need to know.

The Franchise Privacy Blind Spot

One of the biggest privacy traps in franchising? Assuming the franchisor’s privacy policy automatically covers the entire network.

In reality:

• The franchisor usually controls some customer data (e.g. head office CRM, loyalty programs, email lists).

• The franchisee, as a separate legal entity, may be collecting data independently (e.g. local websites, bookings, or promotions).

Unless the privacy policy explicitly states how personal information is shared across the network, who controls it, and for what purpose, it may fall short of Australian Privacy Principles (APPs) — especially APP 1 (open and transparent management of personal information) and APP 5 (notification of collection).

Common Privacy Traps in Franchise Systems

Here are a few red flags flagged by the lawyers we partner with:

❌ Generic or template privacy policies

Franchisors may use boilerplate policies that don’t even mention franchisees. This leaves customers unclear about who’s collecting their data — and can trigger non-compliance.

❌ Unclear third-party data sharing

If data collected by a franchisee is shared with the franchisor (or even other franchisees), this must be clearly disclosed and justified under the APPs. Ambiguity around this can breach APP 6.

❌ Inconsistent or missing consent

Different booking systems, apps or marketing funnels = inconsistent consent practices. If you can’t prove you had permission, you're exposed.

❌ Footer-based privacy policies

Linking to a privacy policy in the website footer isn’t enough. Clear, timely privacy notices should appear right at the point of data collection (e.g. online forms, POS, app sign-ups).

❌ Franchisees unaware they’re responsible

Many franchisees think the franchisor is handling privacy compliance. Often, they’re wrong. They may be legally responsible for their own data practices.

What’s Changed in the Privacy Act (From 10 June 2025)?

The new reforms include:

• Stronger consent requirements

• Greater transparency around profiling, cross-border disclosures, and data sharing

• Much higher penalties: up to $50 million for serious or repeated breaches

• A direct right of action for individuals

• A new statutory tort of privacy (for serious invasions)

The small business exemption is also on the way out, meaning more franchisees will be brought within scope.

What Franchisors Should Do

1. Review your privacy policy and ensure it clearly extends across your franchise network

2. Map your data flows: who collects what, where it goes, who accesses it, and why

3. Update your franchise manuals and onboarding materials to include privacy obligations

4. Provide regular training and guidance to franchisees

5. Seek legal review of your policy and agreements to ensure compliance

What Franchisees Should Do

1. Don’t assume you’re covered by the franchisor’s policy

2. If you collect personal information (even for bookings or mailing lists), you may need your own privacy policy and procedures

3. Ensure you are obtaining clear, lawful consent

4. Know your obligations under the APPs and ensure you’re not exposing the entire brand

Our Final Thoughts

Franchise systems thrive on trust — not just between brand and customer, but between franchisor and franchisee.

The new privacy reforms are a wake-up call. Whether you operate a single outlet or oversee a national network, guesswork is no longer good enough.

Need a lawyer who understands franchising and privacy compliance, someone who can:

• Review your privacy compliance

• Help implement risk-proof data practices

• Future-proof your franchise network against regulatory headaches

Let Bane Legal Services match you with the right expert for your business. Contact Bane Legal Services for a free, no-obligation consultation.

Disclaimer: This article is for general information purposes only and does not constitute legal advice. Bane Legal Services is not a law firm. We connect franchisors and franchisees with qualified lawyers based on our 30+ years of commercial franchising experience.